The Man Booker prize is not having a great year. I'm beginning to feel rather sorry for the organisers. They seem to have a reverse-Midas touch: every initiative, however promising, turns to trash. And now, a new twist in the tale, here comes a posse of literary regicides to declare that Man Booker's game is up. Consider the countdown to the crisis:

First, there was the Beryl Bainbridge debacle. I have already debated this with AN Wilson, so I will not re-heat my comments. Suffice to say that having the late Dame Beryl (an irreverent and witty woman with a beady eye for the absurd) compete with herself for a posthumous "Booker prize" was something that might, more reliably, have been dreamed up by Lewis Carroll, or perhaps Monty Python.

Next, presumably to extend their global appeal, they launched the International Booker. The awkward attempt to occupy Nobellish territory with lifetime achievement criteria and quasi-global scope was set to be awarded for the fourth time this year when, out of the blue, one of the judges, Carmen Callil, dissociated herself from the final verdict (in which she had actually participated) and declared that Philip Roth was unworthy to take the prize.

Some predictable slamming of doors followed this surreal intervention. Behind the scenes, the Man Booker enforcers got to work, and Roth was prevailed upon to ignore Callil's outburst, and graciously accept a now-tarnished trophy.

A damaging episode was then made more embarrassing by Booker chairman Jonathan Taylor going off message in Sydney, Australia. Doubtless exhilarated by the air of the Antipodes, he told the world's literary press that the Booker was superior to the Nobel, which he reportedly described as "whimsical", adding (bizarrely) that it was "at best political". The Booker, he declared, casting off from the shores of reason, showed "greater transparency" and was a far more "competent" alternative.

By the time the long suffering administrators and publicists had extracted Mr Taylor's well-shod foot from his mouth, they must have been praying that, under the sterling guidance of a seasoned administrator like Dame Stella Rimington, and back on home turf, the 2011 Man Booker Prize for fiction, a serious contest involving the cream of the year's new fiction, would go smoothly.

The omens were good. In addition to Dame Stella, Man Booker had assembled a distinguished panel, four experienced writers and critics who could be relied upon to steer the fragile vessel of great literary expectations through the perilous waters of literary London.

Sadly, no such luck. Scarcely had the shortlist been announced in September – a slate of newcomers that cheekily omitted all the fancied runners in the race, from Ali Smith to Alan Hollinghurst – than the book world's commentariat, forming an unholy alliance with publishers, literary agents and even a few booksellers, declared that not only was this a dreadful shortlist, a betrayal of the prize's contract with the reading public, it was also a signal that the Booker had passed its sell-by date. "Booker in Crisis" blared the headlines. Not since Booker's nadir of the late 1990s had the prize seemed in such a hole.

Could it, one wondered, get any worse? Well, yes and no. On the brand-promotion principle that all publicity is good publicity, Man Booker was effortlessly generating column inches for the forthcoming contest. But, simultaneously, a kind of "lit.crit. spring" was gathering momentum to say, Enough is enough, and/or This is beyond a joke.

Now, in a highly significant move, a distinguished group of writers, led by Andrew Kidd of the Aitken & Alexander literary agency, has declared, if not war on the Man Booker prizes, then at least an imminent secession from their lofty and self-appointed sovereignty.

The Literature prize is a passionate, and pointed, rebuke. The award's aim, say its champions, "is to establish a clear and uncompromising standard of excellence". They ruthlessly denounce Booker's fall from grace, referring with contempt to "the administrators'" declared preference for "readability" before artistic achievement. "We believe", they go on, "that the public deserves a prize whose sole aim is to celebrate the very best novels published in our time". Translation: Man Booker is run by Visigoths.

The new prize has the enthusiastic support of several well-known writers, including Booker laureates John Banville and Pat Barker, Costa Prize winner Mark Haddon, Jackie Kay and David Mitchell, plus a shadowy advisory board (composition unknown).

No question: this cri de coeur is going to generate a storm of comment. The Booker will no doubt be forced to defend itself yet again. Its executive will be wise to resist the comforts of arrogant disdain, and take the challenge of the Literature prize seriously.

The outcome, however, is far from certain. The new prize has yet to secure significant sponsorship. The Booker enjoys the canny and professional support of the Man Group, an influential, and well-endowed, international fund.

Prizes are not cheap. If Mr Kidd and his friends cannot raise some real money very quickly, their new trophy will not become a contender in an intensely competitive arena. Names are all very well, but the Booker represents a wealthy establishment, proud of its history and literary accomplishments. It will not surrender its claim to be No 1 without a fight.

The unintended consequences of polemical new ventures are always instructive. My guess is that the top people at the Man Group, who care passionately about new writing, and understand the cultural politics of books, will use the urgent and persuasive challenge of the Literature prize to make some long-overdue reforms, and also to effect some key personnel changes. Jonathan Taylor is deluded. There is no genuine "transparency". The prize he chairs has been a gentleman's club for far too long, with all the well-documented limitations of clubland London.

Andrew Kidd and his friends have launched an opening salvo, but there's going to be a lot more cannon fire across the water before this engagement is over. The forthcoming prize dinner at the Guildhall next Tuesday will be fraught with interest.

A shortlist for the 2011 Booker prize which focuses on readability is the most open in years. Here we gather together audio, reviews, interviews and features so you can get up to speed with all the contenders